How NFTs could redefine the future of the music industry?
What are NFTs?
NFTs, or non-fungible tokens, are one of the hottest topics in crypto today, and it’s not hard to see why.
The space is attracting celebrities, artists and big brands, as well as hundreds of millions of dollars – all for digital artefacts that don’t actually exist.
NFT-based tokens are more than just a digital asset.
NFT-based tokens are more than just a digital asset. They can be coded to contain almost any information. A smart contract could be embedded into an NFT, allocating royalties and rights to the creator while allowing other parties to interact with it.
New artists could use NFTs to create new ways of monetizing their work. They could create an online auction, where they offer a limited run of NFTs containing unreleased tracks and allow fans to bid on them and then pay royalties to the winner each time the track is played.
The same system would also work for live events. An up-and-coming artist could auction off an NFT that comes with front-row tickets at her next concert. The winning user could then resell their ticket or sell a portion of the ticket at a higher price than face value. The artist could set up a royalty system where she gets paid each time someone buys the ticket or even gets paid for each concertgoer who enters the venue with a “pass” generated by the NFT owner.
The possibilities are endless and limited only by our imagination and creativity.
Blockchain technology could significantly reduce the time it takes to buy and sell by automating some of the most mundane tasks.
A blockchain network works because every participant has a copy of the same exact ledger, which records transactions in chronological order. The ledger is updated every 10 minutes and can not be changed or manipulated by any single person.
With blockchain technology, all the parties can work together on one platform to expedite the property transaction in ways we couldn’t even imagine before.
Currently, most of the music industry’s income is generated by record sales.
Right now, the majority of the music industry’s income is generated by record sales.
So far, NFTs have only been used to sell songs and albums. But the technology could also be used to sell music videos and live performances
Rather than simply being sold as a physical album in a store, it could be sold as an NFT on the blockchain.
When people talk of blockchain in the music industry, they usually mention smart contracts and licensing.
In the music industry, blockchain has long been seen as a potential solution to copyright management and payment problems.
NFTs, which represent a distinct digital asset or item that can be owned, is often described as a key element in this area. But they could also help artists discover new ways to monetize their work.
The idea is that NFTs create an “open and transparent” ecosystem where anyone in the production chain can be paid with no room for confusion. A songwriter, producer, record label and distributors could all receive payments based on their contribution to the production of music.
In theory, it’s a better way to do things than the current system, where more than one person is often listed as a song’s composer, but only one gets paid.
Some believe NFTs could be used for everything from releasing albums to selling merchandise to fans and even creating interactive concerts.
But others argue that there are still many barriers to adoption, including legal issues around copyright and high transaction costs for users.
However, there are more interesting things NFTs could do for artists and their fans.
Artists have long been exploring new ways to sell their music, from vinyl to cassette tapes, CDs and, more recently, streaming services. But one of the biggest shifts in the music industry is coming from a very unlikely source — cryptocurrency.
Non-fungible tokens (NFTs) are making waves, thanks in part to singer Grimes’ sale of digital artwork for $6 million. NFTs are a type of cryptocurrency similar to bitcoin that use blockchain technology to create “digital collectables” that cannot be replicated but can be sold and traded like any other digital asset.
However, there are more interesting things NFTs could do for artists and their fans.
Possibilities for NFTs in music
One of the most obvious ways NFTs can be used in music is as digital artwork. In fact, this is how Grimes’ made her millions — by selling an album cover as an NFT on the Ethereum blockchain platform.
An artist could use an NFT to create a limited-edition physical release designed exclusively for their community members.
A growing number of musicians are turning to digital collectables to create unique experiences for their fans.
Nonfungible tokens (NFTs) are starting to become a significant source of revenue for some artists and labels, particularly in the electronic music space.
“The potential of NFTs is exciting,” says Eric Wahlforss, co-founder and chief technology officer of SoundCloud. “It’s a way for creators to truly connect with fans, offer them something valuable and make money while doing it.”
In some cases, that connection is literal: An artist could use an NFT to create a limited-edition physical release designed exclusively for their community members.
“The idea is that you can sell a vinyl or cassette tape that’s been signed by an artist via a QR code on the item,” says Wahlforss. “You’ll be able to scan it with your phone, and then you’ll get access to the exclusive content.
Fans will want to collect these digital assets and trade them with other collectors if they believe doing so would reward their favourite artists.
